Expenses

[Beefy198]

PayMatters, you seem to be saying one thing and then another....

If it's not a disbursement then you don't invoice the expense at cost minus VAT...

But you also seem to be saying that how you bill it. Just to be clear, which one are you arguing for?

[ASB]

PayMatters, you seem to be saying one thing and then another....

If it's not a disbursement then you don't invoice the expense at cost minus VAT...

But you also seem to be saying that how you bill it. Just to be clear, which one are you arguing for?

[ducks for cover]
Ignoring disbursements the simple guidance from HMRC is that if you are recharging expenses then irrespective of whether they are VAT able or not then you charge on the the expenses at the gross price plus vat if you are vat registered, i.e. VAT should be added to all the expenses because they are an integral part of the service. You then need to pay this vat to HMRC (and client generally reclaims it).

The actual VAT you have paid (if any) is reclaimable.

However, the actual fact is that how you decide to recharge the expenses (if at all) is a commercial decision between you and the customer - the only relevance to HMRC is that vat is charged on them (and paid over to HMRC).

It may be that commercially you choose to discount them by the amount of any VAT you have paid - you are at liberty to do this. Equally it may be that you choose to surchange them by a margin, or a flat rate, whatever you want. It is simply trading income.
[/ducks for cover]

[PayMatters]

PayMatters, you seem to be saying one thing and then another....

If it's not a disbursement then you don't invoice the expense at cost minus VAT...

But you also seem to be saying that how you bill it. Just to be clear, which one are you arguing for?

I'm pretty sure I've said the same thing all along but I'm quite happy to call it a day on the subject!

All I will say is that the idea of recharging expenses to your client is not to make a profit on them but if that's what you're doing and if the client is happy with that then you're doing well for yourself and good luck to you.